One University President's Candid Take On The Future Of Higher Ed

Mitch Daniels went from running the state of Indiana, as its two-term Republican governor, to running its top flight public university, Purdue University, based in West Lafayette.

Since Daniels began his tenure in 2013, Purdue has made plenty of headlines. First, the school partnered with Gallup on an ambitious project touted as "the largest representative study of college graduates in U.S. history." The goal? To find out what graduates really value about their educations. The takeaway: Fancy degrees don't mean much for people's well-being.

Earlier this year, Daniels also dropped a bombshell when he announced Purdue's acquisition of Kaplan University. It was an unprecedented move for a public university to take over a for-profit, online college, especially given the for-profit sector's recent regulatory troubles. Negotiations were conducted in secret, which Daniels said was necessary under federal investment rules.

Why Kaplan? It's part of Purdue's broader innovation agenda to offer students a more affordable, accessible, world-class education, says Daniels, though the deal's critics saw things differently.

NPR sat down with Daniels to talk about how he sees his responsibility toward Indiana's students today and in the future. The conversation has been edited and condensed.

Big picture, what are the forces of change shaping the way you and other university presidents do your jobs?

Off the top of my head...

Demographic changes: There are fewer young people at the traditional college age and a demographic shift inside that.

Continuing struggles in K-12 mean a lot of those young people are not college-ready.

The increasing skepticism about the value of many of today's diplomas. At least in some places employers report that folks show up with diplomas who aren't ready to work.

And of course in the denominator, the exploding cost which folks are paying for a numerator of uncertain quality.

Meanwhile, the emergence of all sorts of alternatives or competitive — I'm tempted to say threats — no different than we see all over the economy, in journalism for example.

Those I guess come first to mind.

That's quite a list!

And among those three comprise a whole lot of other issues. Such as forms of alternative certification that can give employers a different way to evaluate talent and give some students another option. You read that at some of the high-tech companies, low double-digits of students don't have a degree. Google doesn't care. They want to know if you can code.

And in a slightly different category: the increasing urgency of educating [students at] nontraditional ages. Those who didn't try earlier in life or tried and didn't complete. As an economy, a society, a nation, we cannot afford that.

I'm a part of this American Academy of Arts and Sciences [Commission on the Future of Undergraduate Education]. One of our leaders said, through our history, generations were more educated than the one before. Well, that's not good enough anymore.

That punches up the urgency of not just doing a better job at the traditional mission of higher ed but doing something effective that we haven't done before, and that's working-adult and later-in-life education.

So was that what motivated the Kaplan deal?

We've taken a step in the acquisition of an online university that specializes in working adults. We're in the process of converting it to a new unit of Purdue.

And with this move, is the mission of state flagship universities changing? Or is it more that the way to get there is changing?

I think of it as a third concentric expansion of our mission. We're a land-grant school. We still take it very seriously. At our founding, we represented what Congressman Justin Morrill [sponsor of the Morrill Act which allowed states to use federal land to create new public universities] and Abe Lincoln talked about: the "sons of toil." And that was a great step forward in the 19th century.

In the 20th century, we grew and opened regional campuses, expanded for veterans who had missed out the first time because they were off saving the world from totalitarianism. And for a place like ours that was important.

In the 21st century in this state, which is very typical, there are 750,000 who started college and didn't complete. It's a huge universe of opportunity if we can figure out how to reach them and get them to a credential. The number one objective is to do something about that. We work on it through our community college. We brought [nonprofit, online] Western Governors University to Indiana. It remains a huge opportunity just within this state.

Did the public reaction to the Kaplan announcement surprise you? [Robert Shireman of the Century Foundation, a critic of for-profit universities, told NPR Ed "I think this is an existential threat to public education."]

We had to be a surprise because of the private nature of the securities laws. We weren't able to air the whole thing while we were considering it. So the questions I got asked in the immediate aftermath were, most of them, the same that we asked ourselves along the way:

With what degree of integrity do they approach all this? Turns out, the highest in the industry. We didn't know that going in.

The best, single example I have is they invented the Kaplan Commitment. You can attend for up to 3 weeks cost-free. If it's not working, you don't pay a nickel. Nobody else in the proprietary sector was doing that, and nobody in our world does it.

Also, at 29-30 percent, they have a higher on-time graduation rate by far than our community colleges or our regionals.

And they fit with the unmet need or non-completer adult population. Their typical student is 33-34, working families usually, with a complicated life. Three-fourths are women. Majority are first-generation. About half are minority. The folks who can't stop life and come live at Purdue or even go on a commuter basis, until this we had nothing for them. One of the first acts of the new board was to confirm a very substantial discount for Indiana students [to attend the online program].

Will the shift to serving working adults from around the world enable Purdue to make money? Is the endgame to rely less on state allocations and more on tuition?

That's been happening anyway, as you know. I think it's overstated; the data do not support the idea that this explains the tuition explosion. Tuition was going up when state appropriations were still going up

I believe the Bill Bowen story: colleges spend more because they can [Economist William Bowen advanced the "revenue theory of cost" in higher education]. In any event that's a phenomenon that is with us now.

And what about at Purdue specifically? You're trying to hold the line on tuition, yes?

We have held tuition flat now for four years, and we're going to for at least the next two. And we've trimmed costs such as room and board and books. It'll be less expensive to come to Purdue in 2019 than it was in 2012. That at a time when state appropriations are lower.

Indiana ranks high in maintaining support for higher education, behind a couple of energy-rich states, but inside that number, based on the vagaries of a performance formula, Purdue's funding has been flat or down while we have the largest student body in many, many years.

Ok, you're talking about the downturn in state support and the need to cut costs in a descriptive way, but are you in favor of public support for higher education?

Obviously I'm a supporter of it. In my last job we tried without success to parlay some dollars and create a free community college for low- and moderate-income people.

Yes, I think it's a fundamental state responsibility. It's a powerful reason, by the way, that somebody better do something about Medicaid costs. One reason Indiana was able to uphold higher ed spending is that Medicaid and pensions weren't eating up the whole budget.

When they devour the budget the idea of more money for higher ed becomes, you'll excuse me, academic.

Speaking of federal policy, are you watching the conversation about changes to higher education finance, such as cuts to loan subsidies and an end to Public Service Loan Forgiveness? How might that affect the way that universities like yours operate?

I'm not spending any time on it except when somebody asks. I do hope there are some changes. I hope they simplify the finance programs to one grant and one loan.

I personally favor schools being at risk for some sliver of defaults.

Our total [student] debt at Purdue is down 30 percent as of 2015-'16. The total borrowing is down $53 million. So our default rates are low and going down too. I do favor policies that might induce schools to work harder than today on completion and delivering degrees.

And what about Kaplan's default rate? You mentioned their relatively low graduation rate before — are you going to try to improve that now that you're running the programs?

Kaplan's default rate is about 12 percent. They are dealing with an incredibly challenged student population. We will be working on that

They were in solid shape with respect to gainful employment [the regulation that required colleges to report how many of their students could pay back their loans, recently suspended by the Trump administration] — best in class — but you always want to be better than that. That'll be a major objective.

Finally, what does excellent learning with the help of technology look like to you? And why is it important?

That whole field has moved light years beyond "turn on a camera and give the lecture you've been giving for 20 years." Somewhere out there, and it may not be that long, these experiences are going to be very much like being there, fully interacting with the teacher and classmates.

One thing I hope we will start absorbing here is the nimble analysis of which students are learning and how and why. That can be used to improve what's going on.

The folks at Western Governors, where I was on the board a long time, they're doing this all the time. And Kaplan does too. Many are stopping every few minutes, taking a measure of how many are grasping the concepts and how many are not. They can identify that a given course does not seem to be producing effective enough learning outcomes and can change in a month or two or three — while the first of our serial committees would still be looking at the question.

I don't know exactly what form it'll take, and I don't know how fast it will get here. But [online education] is not going to be a smaller phenomenon in higher ed. It'll be larger.

I do not want whoever sits here in 10 years to say, "How could you be asleep at the switch?."

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